Defense Date


Document Type


Degree Name

Doctor of Philosophy


Health Administration

First Advisor

Gloria Bazzoli

Second Advisor

Christian Wernz

Third Advisor

Stephen Schwab

Fourth Advisor

Askar Chukmaitov


Performance-based budgeting (PBB) is a variation of pay for performance that is applicable to government programs. It works by increasing or decreasing funding based on pre-established performance thresholds, which incentivizes organizations to improve performance. In late 2006, the U.S. Army implemented a PBB program in all of its healthcare facilities due to rising concerns over costs and quality in its facilities. The U.S. Army’s PBB program tied hospital-level funding decisions to performance on key cost and quality-related metrics. This study examined the impact of this program and a subsequent PBB program on quality improvement in U.S. Army healthcare facilities. Drawing from resource dependence theory, two hypotheses were developed, predicting that PBB would have a positive and sustained impact on quality performance in U.S. Army healthcare facilities. These hypotheses were tested using a retrospective difference-in-differences analysis of quality performance data in facilities exposed to PBB programs in comparison to Air Force and Navy facilities not exposed to PBB programs, both before and after program implementation. Data for this study were retrieved and merged from two data repositories operated by the Defense Health Agency in order to create a dataset encompassing a wide range of administrative, demographic, and performance information about 428 military healthcare facilities. The sample of 428 military healthcare facilities was divided into two groups based on exposure to the Army’s PBB programs. Facility-level performance data on population health indicators and an inpatient clinical safety indicator were compared between the intervention group of 187 Army facilities participating in PBB programs and a comparison group of 241 Navy and Air Force facilities that did not participate in these programs. The study findings supported both hypotheses and suggest that the Army’s PBB programs had a positive impact on quality performance. Facilities that participated in PBB programs increased performance after program implementation, relative to comparison facilities, for over half of the indicators under investigation. Furthermore, performance was evaluated for a 5-year period after program implementation for six quality measures. Performance in PBB facilities, relative to comparison facilities, was either sustained or continued to improve over the 5-year post period for five of the six performance indicators examined. Although this study has several limitations, the results are promising. The findings are relevant to clinicians and administrators in military and government-funded healthcare organizations, as they offer evidence to support the future use of PBB as a mechanism for improving quality performance


© The Author

Is Part Of

VCU University Archives

Is Part Of

VCU Theses and Dissertations

Date of Submission